Wednesday 22 August 2012

Closing Brief

Morning weakness...muted to a large extent by the Fed minutes with renewed QE chatter. Yet, the close was not exactly inspiring for those holding long.

The closing hourly index charts...





What else is there to add? There really isn't much to note right now. Even if we somehow trundle lower to 1380/70, that is still a minor move, and doesn't even come close to taking out the important 1354 cycle low.

Until sp'1354 is broken, all the doom chatter out there can be dismissed as just 'hopeful nonsense'.

The obvious threat to any new bearish positions is none other than the Bernanke, due to appear at the hole next Friday.

A little more later.

3pm update - more QE hopes

This is starting to get really tiresome. No actual change in policy today of course, its merely words. Mr Market jumps a little, the metals leap up, and the cheerleaders on the clown networks tout 'QE is oh so near!'



Bulls will obviously be targetting a new high >1426.

Its remarkable to just consider that the printing maniac might actually do QE3 next month, with the markets - and even more so, commodities, at such high levels.

Yeah..go on do an open-ended QE, lets see how many weeks it takes to get to $150 Oil.

That'll be bullish for the economy, right?

More after the close

12pm update - awaiting the Fed minutes

A bit of a choppy morning, but the underlying weakness is starting to show through. The daily momentum cycles are starting to go negative (finally!), and we have a good chance at hitting 1380/70 within 3-7 trading days.

I'd still guess we'll bounce though, not least with the Bernanke looming next Friday morning, and only then do we have the chance of something more major to the downside.

Its a tricky time to be trading this low volume nonsense, but the stop levels are at least pretty clear, short-stops 1426,  bull stops sp'1353/49.


VIX, daily


Bears should seek a close under 1409, that seems reasonably likely, but if the market gets a bit moody after the Fed minutes are released later at 2pm, then a close in the 1390s is very viable.

If the latter is the case, then a hit of 1380/70 is possible by late Friday.

VIX needs to close in the 16s, as clearly seen on the daily chart.
Lets be clear, until we're back in the 1340s, none of the doomer bears should have any confidence in any daily market declines.

More later...

10am update - first target 1390

Marginal declines so far, its a big choppy out there, as a few indexes almost turned green.

What is important is how we close today. Bears should seek at least 0.5% index declines, with much greater follow through in the tail end of the week.

*housing data released early, slightly better than expected.

sp'60min, rainbow



Daily MACD cycle due to go negative cycle late today or early tomorrow. I think we have a very good chance at hitting 1390 within the next 5-9 trading hours.

VIX is showing no fear, and is now actually -2%

Sp'1354 remains the absolute important low to take out in the weeks ahead. If we can break under that, then September could be good for the doomer bears.

Next update, 12pm.

Pre-Market Brief

Good morning. Futures are marginally lower, sp-3pts , we're set to open around 1410. Certainly, we're not going to open with anything significant.



Bears should most definitely seek a close below the daily 10MA of 1408. A close in the 1390s today would be a real bonus.

We have the FOMC minutes later this afternoon, so there is the possibility Mr Market will get a stern reminder that 'no QE until after the election'. If so, then we do have a good chance of breaking back under 1400.

So, lets see if yesterdays closing hour weakness will have some follow through today.

Good wishes for Wednesday trading!

No bear can be confident until the sp'1340s

So...the indexes actually declined today, after a new brief high on the sp' in the morning. What should the bears be thinking now? Clearly, the declines are nothing less than noise, and with the VIX at 15, this remains a near zero volume fearless market, where the algo-bots are largely still in control.

Lets close today with a quick reminder of the bigger weekly cycle...

SP, weekly, 2yr


As I noted recently on the even bigger monthly chart, the bears need to see a few things in the coming months. The most important being a monthly close back under the 10MA - currently 1345. That sure doesn't seem likely this August, of which we have 8 trading days left to attain it.

For the weekly cycle, its very clear how the bears need sp'1340s to really be sure that the post-June rally is over. Even if we close this week at 1380 - arguably a faint hope right now, we'll still need a further 30pts lower next week, just to have a chance at breaking the primary up channel.

With the Bernanke due to speak at the infamous Jackson Hole next Friday morning, a break into the 1340s...looks out of range right now.

In fact, my concern is that we'll be hovering around 1370 next Thursday..and then start a new up cycle to around sp'1450/75 by late September.

As for tomorrow, we're due to go to negative on the MACD daily cycle, lets see if we can gap under 1408..and close somewhere in the 1390s. That outcome would merit some attention.

Goodnight from London

Daily Index Cycle update

The main indexes closed lower today (surprise!), lead by AAPL. The declines - as small as they were, do make for a possible reversal day.

I suppose some might even dare call it a double top on the SP'500, but regardless of what anyone might like to call it, we did break a new post 2009 high. The primary trend - as seen on the weekly/monthly cycles, remains UP.





From a MACD (blue bar histogram) perspective, we're pretty high on the cycle, and we could certainly fall some considerable way - easily to the equivalent of SP'1380/70 in the coming 3-7 trading days.

In price terms though, it remains clear, until we get a few closes under the recent cycle low of sp'1354, the bears remain having serious problems.

The Bernanke @ Jackson hole next Friday remains the most critical of issues for the bears. Even though the recent rally all the way from Sp'1266 has been based on near zero volume, its feasible we could see a lot of real buyers come in if we level out before breaking 1354.

If we are somehow around 1370 late next week, and we are floored on the smaller cycles, I'll be inclined to go long. The upside target from 1370...would be around 1450/75 by late September.

A little more later.